Creating a Family Budget

If you listened to the money episode of the podcast, you’ll know that having a budget can help relieve a lot of stress in a relationship and herd off future arguments. Creating a family budget can help get your family on the same page. You’ll be more likely to value your money and make more intentional decisions with how it’s spent (or saved).

The hubs and I don’t have a strict family budget. I do keep track of saving for specific family goals (using the Qapital app) and we’ve allocated who pays what bills. Because we manage our own money separately there hasn’t been much of a need to have a joint budget. We do talk about where our money goes and things we may want to purchase in the future. If you think a family budget would work for you, here’s how to get started on the right foot.

Pick Your Budgeting Method

Whether it’s old school pencil and paper or an app, find something you’re comfortable with. You’ll want something that allows you to easily track your income, expenses, and spending. If you’re creating a family budget, find something you and your partner will have access to. Download the FREE budget planner as a starting place. I personally use YNAB (You Need A Budget) to track my income and spending. It allows me to set budget amounts for specific categories, make adjustments and links directly to my bank accounts to track transactions.

Rethink allowances

Stokely isn’t old enough to do chores yet, but when he is, he’ll work for his money. Growing up, I had a chore chart. When I was old enough for an allowance, it was based on the chores I was doing around the house. It’s important to instill money values into kids when their young. Working for their own money teaches them that that’s how the world works. We don’t get money unless we go to work. We don’t buy things unless we save for them. Teach them young and they’ll grow into adults that understand the value of money.

Make savings goals together and keep track of the progress

The hubs and I use the Qapital app to create joint savings goals like our trip to Barcelona next year or new living room furniture. I love the app because I’ll get a notice when I’ve reached a certain percentage of the savings goal (with fireworks too!) and it’s easy to see how much we have left before we reach our goal. When we hit a goal in the app, I transfer the money to a high-interest savings account until it’s time to spend it (because I don’t want to lose the interest money by keeping it in the Qapital account).

You can even bring kids into it by saving for those extracurricular they might want to partake in. Make sure you explain to them the differences between wants and needs – things that have to get paid for first, like food and housing, before money can be spent on the fun stuff. And then help them create a savings goal for something they are interested in. They’ll get way more joy out of paying for something they worked hard to earn and were dedicated to saving for.

Talk about your budget frequently

Because I manage most of our finances the hubs and I don’t do this too often but it’s important to sit down and talk about where your money is coming in from and where it’s going. Most financial folks will suggest at least monthly. Look at what went well over the month, where the challenges were, and how to re-correct for the next month. This is actually something that’s great to do with kids so they can have a better understand of what happens to “all that money you get paid” over the month.

Get serious about paying off debt

Us “millennials” (or folks between the ages of around 24-39ish) have the highest debt in the history of this country, with student loans being a huge factor for many of us. And unless the next President manages to forgive all that debt, we’ll be paying them off for a while. Sometimes looking at how much debt we actually have can make us want to pretend it doesn’t even exist, but turning a blind eye is only setting your future self up for the struggle bus. The best way is to pay them off from smallest to largest. Give yourself those wins so you’ll feel motivated to keep going.

Talk about money

If you read last week’s post, I’m all about having conversations about money with your partner. And it’s even more important to talk about it with your kids. I’m 100% sure that my ability to manage money comes from my mom showing me her checkbook every two weeks and showing me where money went. You’ll be setting your kids up for a lifetime of success if you’re able to help them see the value of money and the pitfalls that can happen when you spend more than you have.